Gaming Stocks Lose Momentum Even as Broader Markets Recover

The S&P 500 Index closed in the green last week thanks to consecutive gains on the last two trading days. However, the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ), which invests in a basket of gaming companies, closed in the red. The ETF had outperformed the broad-based index in the preceding four weeks but lost momentum last week.

The Star Entertainment Group and Bally’s Corporation were among the biggest gainers last week. Meanwhile, Skillz and Gambling.com were among the major losers.

Top Gainers

The Star Entertainment Group (ASX: SGR) +23.8%

The Star Entertainment Group was by far the biggest gainer in our coverage of gaming stocks, adding nearly a quarter to its market capitalization. The gains appear to be a vote of confidence from the markets in the key leadership changes announced by the company last week.

As part of the management reshuffle, Steve McCann, who was brought in to lead the company through its financial crisis and remediation plan, stepped down as CEO. Moreover, Peter Hodgson and Toni Thornton, two of the company’s non-executive directors, resigned last week.

Star appointed Bruce Mathieson Jnr (a member of the billionaire Mathieson family, one of Star’s largest investors) as the new CEO. Concurrently, Soo Kim, chairman of the US-based Bally’s Corporation, took over as the new Chairman of the Board.

Notably, the leadership changes come a month after Star secured the necessary regulatory approvals from the New South Wales Independent Casino Commission and Queensland’s Office of Liquor and Gaming Regulation, which allows the conversion of a $300 million Australian dollar investment from Bally’s Corporation and Investment Holdings Pty Ltd into equity.            

Meanwhile, the new leadership team has vowed to take significant measures, including layoffs, to revive the company, whose share price is still down by over 30% for the year. “There has to be a change. There are no sacred cows, and even the notion that we have a corporate office has to be examined,” said Kim on the changes the new management team plans to implement.

Bally’s Corporation (NYSE: BALY) +9.98%

Bally’s Corporation was another major gainer last week and saw a nearly double-digit rise. The gains were primarily attributed to the New York State Gaming Commission’s approval of the multi-billion-dollar casino-hotel resort at Ferry Point Park in the Bronx.

This is a historic milestone, as the New York City market is considered one of the most lucrative, yet untapped, gaming markets in the world. Despite high development costs, the license provides a massive long-term revenue stream that investors had been pricing in as a “risk” until the formal approval.

Notably, earlier this month, Bally’s secured $1.1 billion in new financing commitments from major lenders like Ares Management, King Street, and TPG Credit, which would help it strengthen its balance sheet.

Markets also gave a thumbs-up to Bally’s active participation in Star Entertainment’s turnaround and a section is speculating that it might take over the struggling Australian company.

Super Group (NYSE: SGHC) +3.9%

Apart from Star Entertainment and Bally’s, there weren’t many gaming stocks that saw outsized gains last week. Super Group, meanwhile, gained nearly 4% and extended its YTD gains to over 90%.

There wasn’t any company news last week, and SGHC continued its upward momentum. The company’s recent financial performance has been encouraging, with a 26% year-over-year rise in Q3 revenues, led by strength in international markets. Its adjusted EBITDA rose 65% to $152.1 million during the quarter, which was ahead of Street estimates.

Following the stellar Q3 performance, SGHC raised its full-year revenue guidance to a range of $2.17 billion to $2.27 billion, up from the previous guidance of $2.125 billion to $2.20 billion. Similarly, it raised the annual EBITDA guidance to $555 million and $565 million.

Biggest Losers

Skillz (NYSE: SKLZ) – 14.13%

Skillz was the biggest loser in our coverage of gaming stocks, with a loss of over 14% that turned the company negative for the year. Last week, Skillz faced a deadline to file its overdue 10-K and 10-Q financial statements to remain in compliance with NYSE listing standards.

While management had previously expressed confidence in meeting the “extension period” deadline, the lack of definitive confirmation of completed filings by Wednesday triggered a wave of “de-risking” among investors who feared a potential delisting or move to the over-the-counter (OTC) markets.

It was a roller-coaster ride for Skillz, a former meme stock darling, in 2025. The stock hit its 2025 high of $9.11 in mid-August amid the rally in meme stocks, but has since lost over 46% from those levels.

The company reported its preliminary Q3 earnings last month, which were a mixed bag at best. Its revenues were $27.4 million, which were broadly in line with estimates. However, despite an improvement in its adjusted EBITDA loss compared to the prior year, the company still reported a significant net loss of $17.4 million, which dampened sentiments.

Apart from the tepid financial performance, a potential delisting remains a hanging sword for SKLZ investors.

Gambling.com (NYSE: GAMB) – 8.19%

With a loss of over 8%, Gambling.com was among the major losers last week. The stock, which is quite volatile compared to its peers, often whipsaws between the week’s top gainers and losers. For the last four consecutive weeks, it has alternated between the week’s top losers and gainers.

As has been the case in recent weeks, there wasn’t any company-specific news that triggered volatility in the stock. However, GAMB, which is down over 63% for the year, is facing some structural challenges due to recent changes in the Google search algorithm.

The company reported revenue of $38.98 million in Q3 2025, which fell short of the analyst consensus estimate of $41.04 million. The company also lowered its 2025 guidance for the second time this year. During the earnings call, GAMB noted that revenue was negatively impacted by less favorable search rankings that persisted through the third quarter.

Betr Entertainment (ASX: BBT) -5%

Betr Entertainment fell 5% last week after announcing that its CFO, Darren Holley, would retire at the end of the year. Holley had been with the company for nearly five years and was a key figure in the “BlueBet” IPO, the merger with Betr, and the acquisition of TopSport.

Investors often view the sudden exit of a CFO as a sign of internal friction or upcoming financial adjustments, and this is invariably followed by downward price action.

Moreover, last week, Betr issued a “Cleansing Notice” regarding the issuance of 196,850 new shares to a third-party service provider in lieu of cash. While the amount was relatively small, it served as a reminder of the company’s continued use of equity to fund operations, contributing to the dilution risks frequently cited by analysts.

Other Major Gaming Industry Developments

The prediction markets business continued to witness traction, and last week, DraftKings officially entered the prediction market space, announcing the launch of DraftKings Predictions, its new standalone mobile app dedicated to CFTC-regulated event contracts.

Cryptocurrency exchange Gemini has also joined the bandwagon, launching its prediction markets platform, Gemini Predictions, across all 50 U.S. states.

Robinhood continued to expand its prediction markets, including NFL parlays and player prop bets, which directly compete with traditional sportsbooks. The popular retail stock trading app has been expanding its prediction market business, which, according to CEO Vlad Tenev, is Robinhood’s fastest-growing business ever, having reached the milestone of generating $100 million or more in annualized revenue in under a year.

Meanwhile, Crypto.com withdrew its sports event contracts and prediction market offerings from Arizona and eight other US states amid legal pressures and enforcement actions. While the prediction market business is growing at a brisk pace, it continues to face regulatory uncertainty, with several US states considering either regulating or banning such platforms.